TEPs remain an attractive investment

The reason for this is few investors realise that some TEPs cost less to purchase and maintain than their current value, and therefore their capital is guaranteed.

Commenting on this, IFA John Davies, director of John Davies Investment and Mortgage Services, said: "In these uncertain times the combination of the sum assured and any reversionary bonuses previously earned since the policy's inception presents the opportunity for investors to re-enter the market, limiting any risk. Offering security in a tough investment climate and good growth potential when the markets do pick up, with-profit funds are possibly now at, or close to their floor. If they buy now, the growth potential could be a very attractive proposition for medium to long-term investors."

According to Mathew Roche, marketing manager for Surrenda-link, now is the time for investors to pick up some real TEP bargains.. "It is currently a buyer’s market. In light of the FSA's decision to ensure life offices make policyholders aware of the option to sell their policies, which came into effect in September 2002, more policies are now available to choose from."

All TEPs are protected under the Financial Services & Markets Act for further peace of mind for investors. This means that even in a worst-case scenario, such as the issuing life company going into liquidation, the investor would still receive 90% of the TEP's guaranteed element.